Family Feudal: Redstone, 84, Losing Heir at Viacom

Sumner Redstone "played down" reports over the last 24 hours that he had becomed estranged from his daughter and once-presumptive heir, Shari Redstone.

But the effect of his words was to confirms suspicions, as Richard Siklos and Geraldine Fabrikant write in The New York Times today, that the 84-year-old Mr. Redstone is preparing a William Randolph Hearst-style legacy: ensuring that his heirs are enriched by his controlling interests in CBS Corporation and Viacom, while media and entertainment professionals take over the running of the businesses.

There are a lot of them. CBS and Viacom, taken together, control CBS's radio and television stations, the Simon & Schuster publishing megalith, cable channels MTV, BET and Nickelodeon, and Paramount. The two publicly traded companies are worth about $53 billion, and Mr. Redstone himself is worth about $8 billion.

Speaking to The Times, Mr. Redstone said:

“I have no intention of removing her from the board,” he told New York Times reporters Richard Siklos and Geraldine Fabrikant in an interview last night. “I haven’t encouraged her to take a lesser role, and I consider her a credible candidate to succeed me, but I believe the board should pick my successor.”

But Mr. Redstone did not deny that he and his daughter have talked about Ms. Redstone leaving the boards of both companies, of which she is currently vice chair; Ms. Redstone selling her personal 16 percent interest in the two companies back to her father; and her acquisition of "the family’s privately held movie theater chain, National Amusements Inc., which she now runs." Mr. Redstone did not deny that such talks had taken place.

The coverage of the story in The Wall Street Journal has sent Wall Street into a tizzy at the prospect that real boards of directors might really control CBS and Viacom after Sumner Redstone leaves; that would make the companies into a quite diverting plaything for bankers and investors.

That, in turn, as usual, sent the media world into its own tizzy.

As one analyst told The Times:

“The market is hoping that the Redstone discount — meaning the company could never be sold — may one day be going away,” said Michael Nathanson, a media analyst at Sanford C. Bernstein.

A Viacom spokesman, Carl D. Folta, said said Wall Street speculation that the tensions mean that either CBS or Viacom could be for sale was unfounded.